Switzerland Economic Outlook

October 23, 2018

The Swiss economy likely settled into a softer, but still strong, pace of growth in the third quarter. Business sentiment improved in September as the outlook for the manufacturing, export-oriented, and financial sectors brightened; nonetheless, the KOF economic barometer remained well below levels seen at the start of the year. The manufacturing PMI moderated to an over one-year low in September but remained above the series’ long-term average, suggesting business activity in the manufacturing sector is still robust. Meanwhile, retail sales recovered meekly in August after July’s drop. In the political arena, on 25 September the Economy Minister Johann Schneider-Ammann announced he would retire from the seven-member governing cabinet at the end of 2018. Political parties can now nominate candidates for the position and a secret vote by parliament will likely take place on 5 December. Karin Keller-Sutter and Hans Wicki, both from the Liberals Party, are considered top contenders for the position.

Switzerland Economic Growth

Following what should be an impressive performance in 2018, the economy is expected to shift into a lower gear in 2019 due to slower global growth weighing on the external sector and as the stimulus from licensing revenue from sporting events dissipates. Met the why particular panelists expect GDP growth of 1.8% next year, which is unchanged from last month’s forecast. For 2020, panelists expect GDP to expand 1.6%.

Consumer sentiment among Swiss households was relatively unchanged in the August-October period, with the index prepared by the State Secretariat for Economic Affairs (SECO) inching up from minus 7 points in May-to-July to minus 6 points.

The KOF economic barometer—a leading composite indicator for the Swiss economy forecasting a six-month period—dipped to 110.1 points in October from a revised 112.3 points in September (previously reported: 112.2 points).

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